Retail Strategies: Retail Design

May2004

Having it All

Having it AllAn uncoventional arrangement that works

By Jackie Micucci

Photos by Lori Spears

Paul Licht (top left) began Site for Sore Eyes 25 years ago as an independent chainbefore selling to Sterling in 1993; there are 30 locations in Northern California carrying a core group of vendors that are part of the franchisees unique co-op advertising and marketing plan; franchisee Carol Seltzer (bottom right) worked for Sterling’s corporate offices before acquiring three locations with her husband Marty in 1998.

Some might say Site for Sore Eyes is a David that has joined forces with a Goliath. The regional chain of 30 stores in Northern California became part of the Sterling Optical empire 11 years ago. However, from the get go Paul Licht—who began the Site for Sore Eyes company 25 years ago as an independent retailer—and the co-op of owners have worked hard to distinguish themselves from the pack and be more than a typical franchise of a behemoth chain. They have been able to do this through an innovative marketing and advertising program and a stable of solid vendor relationships as well as having the trust of their parent company. As a result they’ve created a situation that gives them the best of both worlds—the small independent and the big chain.

DYNAMICDISPENSING

WHOSite for Sore Eyes

LOCATIONNorthern California

ESTABLISHED1979acquired bysterling optical1993

NUMBER OF LOCATIONS30

20/20 takeThe best of both worlds creates the best environment for customers.

Site for Sore Eyes was founded in 1979 in Berkeley, Calif. by Licht. “I began selling franchises in 1985,” he explains. “As a franchiser I administered and ran the advertising and marketing program among the many other duties a franchiser has.” In ’93 Licht sold the chain to Sterling thus becoming a franchisee to Sterling retaining two stores. “One of the main responsibilities of a franchise is advertising and marketing,” he notes. “Sterling ran that from the New York office. They didn’t really understand the Site for Sore Eyes brand. How it stood in the marketplace and what we needed from an advertising and marketing standpoint here in Northern California.”

It was time for Licht and the other Site for Sore Eyes franchisees to take action.

“For lack of a better word we had a mini revolution,” he says. “We hired our own advertising and marketing firm—a local based agency that had a better grasp of the Northern California marketplace. However, we weren’t happy with the administration of the advertising and marketing fund. Most of it was being diverted to other parts of country. The co-op money from vendors was scarcer to use. It was raised by Sterling and not readily available to us.”

Licht was able to convince Sterling to set up a completely separate ad and marketing unit for Site for Sore Eyes. “We employed our own agency and collected our own royalty fees,” he explains. “We spent the money in the manner in which we felt was more beneficial for our local franchisees. We had double digit increases. Our sales performance became the jewel in Sterling’s crown. We were their most successful region.”

The co-op of franchisees acts for the greater good of the Site for Sore Eyes chain. They administer the ad co-op funds and decide what vendors to include. “We have a unique system as franchisees,” says Licht. “A certain percent of sales for ads is part regional and part self-directed by the franchisee. Everything is passed through our committee to ensure uniformity. It’s not just each store’s personal benefit. It’s been working incredibly well. Sterling has tried to duplicate this in the rest of country but that’s easier said then done. It requires enormous effort from someone who is not the franchiser. I can tell you as a former franchiser I would have been loath to operate such a system.”

“Getting the buy in from existing franchisees was a tremendous feat,” maintains Carol Seltzer, a franchisee who owns three stores. (She came into the optical fold in 1992 when she was hired to operate Sterling’s corporate offices. She left corporate life and acquired her Site for Sore Eyes locations along with her husband Marty in 1998.) “It required them to pool in their ad royalties—a basis that made sense to them. We had to deal with franchisee to franchisee in order to get the buy in. This was very taxing and quite a hill to climb.”Site for Sore Eyes co-op ad fund differs from that of traditional co-ops. While vendors do contribute a dollar amount to a fund that goes to the stores’ direct ad campaign, it is the Site for Sore Eyes name, not that of the vendor that is prominently featured in the advertising. “The secondary message is the frame vendor’s brand. The primary message is the Site for Sore Eyes brand,” notes Seltzer.

“We realized early on [traditional co-op advertising] wasn’t going to be effective for us,” adds Licht. “The vendors agreed to market Site for Sore Eyes with their money and not their products. The co-op is almost like a purchase of real estate. We use the money to drive people into the stores.”

All the stores carry the same core of vendors. “We try not to put competing vendors in our stores at all,” says Seltzer. “We try to give vendors that support us as much of the market share as possible. We also have contact lens vendor partners where we create a similar situation. Our idea is to make pricing as attractive as possible. We give them preference wherever possible with signage and merchandising that speak to our customer.”

“We do trunk shows with our co-op vendors and special programs,” adds Licht. “The brands not in the program tend to be more boutique vendors.” Spectacle lenses are not part of the co-op ad fund and are left up to the individual franchisee— some of which have in-house labs—to select.

“Our core of vendors has remained the same since the beginning. We didn’t bring in more vendors than we can support,” says Licht. “Spots in our vendor program don’t open up very often. We just took on one that was trying to get in for six or seven years. If we wanted to be less scrupulous we could raise a lot more money but we would only be able to do that one time. I’ve been 31 years in the business. I’ve seen people come to vendors with a co-op fund that’s no more than ‘give us your money.’ We don’t promise what we can’t deliver.” (Because of a confidentiality agreement each franchisee signs, Licht and Seltzer cannot discuss which vendors are part of the Site for Sore Eyes co-op.)

Advertising for the stores includes direct mailing, electronic media such as TV and radio as well as print ads and billboards. Site for Sore Eyes stays away from direct-price advertising. “We don’t feel it serves our interest or our consumers’ interest,” notes Licht. “What you’re really doing is setting up expectation for what the product is going to cost them. It’s an artificial ceiling and then you have uphill battle.”

“One of the challenges is getting the message to be consistent,” says Seltzer. “Before the co-op was founded everyone had their own message and image and ads and sales that they were running. It was a consistent name but not a consistent message.”

Consistency in general has been a challenge for the Site for Sore Eyes franchisees. “One of the challenges for the chain is keeping consistency—consistency in the customers’ experience,” notes Seltzer. “We want the experience to be consistent but unique to that specific location. The stores don’t necessarily look alike. People are not looking for robots. They want personality; because it’s local ownership we’re able to do that. We train each staff to use the offers we run to maximize the effect. We train them for a period of time on specific programs. They are the key to our success. We take our message and best utilize it to maximize sales.”

One of the ways that message is utilized consistently is through the chain’s warrantee program. For a $25 fee, customers are given a one-year guarantee that eyewear that has been broken will be replaced free of charge and replaced if lost for half the price. But rather than have the warrantee expire at the end of the year, customers can use that $25 as a store credit toward a new pair of glasses.“The other leadership role we’ve taken is on the contact lens side,” says Seltzer. “Two years ago we took a position to sell a year’s supply of contact lenses to our patients. We’ve taken that to be our contact lens focus no matter what lens they are in. The Rx expires after a year in California. We want our customers to feel comfortable in the fact that we are their eyecare provider. They do have many more choices; they do have online services. We want to keep their business.”

Not surprisingly, managed care has been another challenge for Site for Sore Eyes. “Nothing is more challenging and more difficult,” maintains Licht. “And the face of it is changing on a daily basis. We are on the panel of dozens and dozens of managed care plans. We have our own plan called Managed for Life for under-served companies with eight to 10 employees that are overlooked by the larger companies. We deal with the stresses of various plans on a day to day basis. We are helped by being part of big chain. Sterling has a fax back system telling each franchise owner details of each plan and how to get paid.”

Managed care customers are not treated like pariahs. “We restrict our customers much less,” says Seltzer noting that the stores will use managed care benefits to sell up when possible. “We don’t believe in just saying, ‘Here are the 10 frames in the program.’

Trunk shows and special programs are some of the things Site for Sore Eyes does with their co-op vendors.

We give them the maximum amount of choices. We look at multiples all the time and we’ll suggest to customers to use the managed care pair as a spare. We use it any and every way but we do not limit it.”

Site for Sore Eyes has indeed been able to go beyond limitations. “We have the best of all worlds—local ownership of stores, local and regional management of advertising and the clout and buying power of a national chain,” says Licht. “It gives us more power with the vendors. It’s made the operation stronger.”

The chain offers a one-year replacement warrantee to customers that can later be used as a credit.